U.S. — Social Security's trust fund is projected to become insolvent by the end of 2032, according to the trustees' report. This would result in a 22% cut to monthly Social Security checks for beneficiaries.

The average reduction would be approximately $500 per month if cuts occur. Social Security currently provides benefits to roughly 70 million individuals.

The share of total wages subject to Social Security taxes decreased from almost 87% in 1984 to approximately 83% today. Social Security taxes annual earnings up to $184,500.

Elizabeth Wilkins, CEO of the Roosevelt Institute, said in a podcast interview: "The Social Security trust fund is under strain because Congress has failed to update the program for the economy we actually have." She added: "Too much income now flows to the top, where it escapes Social Security taxation."

The Social Security tax cap on wages adjusts each year to track inflation. The tax cap has been in place since the program's inception in the 1930s. In 1983, U.S. lawmakers overhauled Social Security by gradually increasing the retirement age and raising payroll taxes. The Social Security tax cap was not adjusted in the 1983 reforms to account for subsequent labor market shifts.

Actuarial projections Congress relied upon in the 1980s assumed Social Security would continue to tax approximately 87% of wages for the next 75 years. From 1983 through 2000, real earnings for the top 6% of American workers increased by 62%, according to a Roosevelt Institute report. During the same period, real earnings for the 94% of workers with incomes below the payroll tax cap saw average gains of 17%.

Removing or phasing out the tax cap could close between 22% and 67% of Social Security's funding gap, according to Social Security Administration scoring. Joel Eskovitz, Senior Director of Social Security and Savings at the AARP Public Policy Institute, said in a podcast interview: "Social Security is a very strong program that can be fixed." He added: "Most Americans want it to be fixed by not cutting benefits."